Subscriptions Are Remaking Corporate America (2018)
barrons.com
barrons.com
For one, I hope subscriptions die. It's a pernicious trend that is borderline fraud for consumers (like gyms, profiting from users who simply forget to unsubscribe or making it painfully hard to unsubscribe). It's also exclusionary for most of the world for whom the subscription price might be a year's income. With downloadable software it was kind of possible to find a crack online, but web apps and content make it almost impossible.It also makes individual property ownership impossible. we need honest,anonymized payments on the web.
If you could easily see recurring billing charges and cancel on your bank's end easily, companies would have to step up and offer a useful service.
Is that correlated with having ample money to pay for them?
That being said, health insurance is an example of a subscription in the USA I find predatory.
On top of that, subscriptions are also relationships you have to keep track of. With a lot of subscriptions, it can become overwhelming.
(It may differ between classes and countries, but over here in Poland around people I know, having a private credit card is like shaving with a straight razor - it's awesome if you can handle it without hurting yourself, but most people can't and are smart enough to not even try.)
Over here it's quite normal for middle-class people to have personal credit cards, but it's not as important for building up a good credit rating or anything like that as it is in the US.
as someone who treats a credit card like a charge card (pay it off in full every month, without exception), I don't really understand this mentality. imo, managing a debit card is way harder. I have to ensure that I have enough money in my checking account every time I make a purchase. it feels like inevitably my payday will line up in such a way that I overdraft on a purchase I could have easily afforded by the end of the month.
The danger with having a credit card is that you have an option to not pay it off. With debit cards, it's impossible. You can overdraft a little if you're tricky, but that's about it - whereas with a credit card you can end up going negative and finding it difficult to get back to black (whether because of your own faults or external circumstances).
I compared a credit card to straight razor because both are useful and safe in skilled hands, but create danger of hurting yourself if you're unskilled - a danger that doesn't exist with safety razors / debit cards.
If you set up a direct debit (allow a company to withdraw money from your account) you will be able to view all the details about it on your web banking (which company, how much and when the last debit occurred).
But most importantly, you can unilaterally cancel the direct debit from within the web banking interface. It will notify the company that you cancelled it on your side and you are guarnateed to not have any money withdrawn from them.
This makes life easier but does not solve the problem completely. Cancelling a direct debit does not cancel any debt you have (obviously) but it also doesn't cancel your account/contract with the company. So there is nothing stopping the company from continuing to bill you. It will just make it harder for the company to recuperate their money.
You can cancel a recurring payment with a few clicks.
Unfortunately, most foreign companies don't offer SEPA, but my bank also offers virtual CCs that are tied to a single biller, so not only I can revoke them at any time, they are also useless if leaked.
Regular CCs are a pain in comparison.
Dark patterns at the off-ramp deserve more attention too. Try to unsubscribe from netflix and they would just as soon give you an extra one or two months free, asking you to cancel later. They know something finally prompted you to the task after a few months of sparse usage which may not happen the next time. Before you know it, you helped make a trusted account on a friends device and it becomes easier to justify the expense.
Then again, you can’t use subscription software at all after the company completely moves on either - no windows 95 compatibility mode to keep using your expensive desktop applications. So you still end up with unusable software eventually - longer peak but a shorter life for more cost
The fundamental problem is how difficult and expensive it is to make software and maintain it year after year
They could also release a final patch that unlocks all content and removes the license check.
Before the next 5 lb jar was supposed to get sent, they sent me an email saying they were about to charge me and I had until X date to cancel.
You can make subscriptions work if your intentions are good and you’re not looking at them as a revenue stream based on people forgetting to cancel.
I ended up cancelling that next shipment but ordered again a few weeks later.
The model isn’t bad. Just depends on the execution.
I am afraid investors only care about growth. First they are going to grow untill no more subscribers. Preferably the company will have monopolistic position by that time. Then they will start increasing rates up to "what market will bear". Then they will start tweaking "personalizing" experience with microtransactions etc trying to squeeze more. Add regulatory capture to this. This rent-seeking won't stop.
I stopped using apps. I run to clear my head and try to stay healthy, not brag that I run.
[edit]
Software (and other media with a high development cost, but low marginal cost such as films) are particularly valuable to lease, because you remove the secondary market, which can cannibalize sales.
Food and printer ink are different because they are consumables.
Yup. Two years contracts, automatically renewed, with three months notice period for cancellation, cancellation by post (yes, by a papper letter), no early cancellations. Reverting the monthly direct debit transaction to "give a hint" to the predatory "service provider" triggers furious response from their accounting and customer service, and transaction cancellation fees. It's hard to imagine how the setup could be even more predatory for a customer. Fuck, even the memory of dealing with this raises my adrenaline level.
I can deal with a large one time payment. A bunch of random 5 dollar a payments a month isn't going to float. I crawl through my credit card statements looking for oddities. And it just bugs me.
I too share the subscription fatigue, and avoid subscriptions as much as possible. I prefer to pay once, up front.
Bank of America has discontinued this service, and I haven't setup a new workflow, which is disappointing. but I mean, it is one solution.
I guess I should mention that I am poor-ish. Right now I am getting lumber from a reclaimed lumber place and making furniture in a Amish style. Then my sister paints and distresses it. So if a bunch of random five dollar charges hit my account at once and I am not expecting them it could be a problem.
In some ways, I agree. In others, I don't. I mean, the problem is largely in the difficulty of unsubscribing. If that were easier to manage (and virtual cards are one way to deal with that) I think it's not such a problem, and even has some advantages. But you could easily argue that this difficulty of unsubscribing is built into the business model; people who sell subscription based services know that the harder it is to unsubscribe, the more money they will make, so... incentives are not, as it were, aligned, and that tends to lead to suboptimal outcomes.
I think there are valid arguments for the subscription model; I know before buying a car, I rent all of the models I'm considering, for a week or more. This is often harder with things like software, which don't have as strong of ownership protections as physical goods, meaning I usually can't rent software to try it out, if it's not sold on a subscription plan. I'd consider renting a car permanently, (except that it's either massively expensive or massively inflexible; getting out of a lease, as far as I can tell, is way harder than selling a car, and renting cars outside of a lease is uneconomical. I feel the same way about commercial real-estate; usually the penalties for breaking a lease seem a lot worse than just selling the goddamn building a year into ownership. And this is possibly your objection; if you have perfect knowledge of your future needs, buying software up front is probably a lot cheaper. But, without the ability to sell the software when you are done, it's not really comparable.)
>If you're wealthy enough to put money for couple years worth of service into a virtual CC for every service you can use, you're probably wealthy enough to manage all this stuff for you anyway.
I think wealthy people would be willing to pay for an easier solution to this. I would. the virtual credit card solution is clumsy because the software is bad (I haven't actually gotten the capital one solution suggested earlier setup, it might be great, but the citi solutions and the now defunct bank of America solutions require flash and are... clumsy) - the problem isn't the money; for all the virtual credit card solutions I've tried, the payment goes to your regular credit card, so you don't need to sink any capital, it's just work
(but, of course, this is mostly about how difficult it is to cancel subscription services. If it were easy, this wouldn't be a problem. - I think this is our major point of disagreement.)
I was readying a long comment addressing your individual points, but I realized I can compress it all to this:
The overall reason why I prefer ownership of durable goods over subscriptions (and the planned obsolescence economy) is reduction of variance in opportunities and quality of life. At the time when I have the means, I can buy something. If I have less means or that something is very expensive (e.g. a new car, a house), I can convert it into a "subscription" myself using my bank, via various forms of loans and installment payments. And then when I go broke, I can still use the thing I own, perhaps to help myself get out of the predicament. Subscriptions bundle this all together, making the utility directly dependent on my cash flow, prevent me from optimizing the value I derive from them (through ToS that limit a lot of non-standard use cases), and deprive me from the ability to use a good in the time of crisis.
As long as I felt that they tried I would be alright.
Our wonderful journey wouldn't cut it. But a simple, we went broke would be cool.
I just cancelled Netflix because I'm also paying for Amazon Prime. Netflix hasn't had anything worth watching for a good few months but it took me longer than that to go in and cancel it. But the trajectory suggests that you'll need to sub with Amazon, Netflix, HBO, Disney, etc. if you want the full range of streaming TV. You're going to have to start micromanaging that if you don't want to throw your money down the drain.
Patreon's another one. Really cool idea, but everyone with a Youtube or a blog or a Twitch stream is pushing it. So it's a case of subscribing to one person for $10 a month or 5 people for $2 each.
After that, you can get a monthly subscription of underwear, shaving stuff, make up, etc. at which point it seems like a purely wasteful cash grab.
The problem is, even with the increased competition, prices are only increasing.
I expect someone will make a site or app or service for managing this, which lets you maintain a "want to watch" list with optional priorities.
For each streaming service, the app would tell you which if the items you want are on that service, and how many total hours of content that is. You can use this to help decide which, if any, streaming services you should subscribe to for each month.
I have no idea where one would get the data for such an app, but this site [1] seems to have it, so I infer that it is possible to get it. They have a paid API, so maybe they could even be used as the data source.
Awesome.
https://www.zuora.com/2018/12/09/how-subscriptions-are-remak...